In 2006 before the M-PESA innovation, there were only 2.4 million bank accounts in Kenya. Access to formal financial services was a preserve for a few. Fast forward in 2020, there are over 40 million bank accounts with over 20 million of them riding on the M-PESA customer base. M-PESA has liberalized access to financial services. Kenyans from all walks of life can now send and receive money not only within Kenya but from over 100 countries across the globe. It is an innovation which has not left behind even 80-year-old grandfathers and grandmothers. The simplicity and convenience of M-PESA make it ubiquitous.
Kenyans in urban areas typically send money to their dependents in rural arrears. Mpesa didn’t change this. Not even one iota. People were doing this using bus courier service, money orders etc Mpesa just made it more efficient, trustworthy and convenient. The sender of money in the M-PESA platform receives an alert which creates trust and assurance that the money has been sent. The receiver also gets an SMS alert marking the end of the financial transaction. Both of these happen within seconds unlike before where the turnaround time was undefined and the suspense and anxiety could break a business and personal relationships. Money is an emotive thing and people love their money and the promise of sending money is a big thing in business and personal relationships. A convenient way of doing it
Mary, a 20-year-old university student can receive pocket money from her parents in a matter of seconds and use it for her upkeep. She will then focus on her studies and have not to worry about how long a courier service will take to bring her the pocket money was the case before M-PESA. She also doesn’t have to keep the money in cash which can get stolen or lost since there are many friends of hers and her roommate who visits their room on a daily basis.
M-PESA has made it very easy for Kenyans to fundraise money in different instances such as paying for hospital bills, school fees etc and this is done remotely without the logistics and headache of organizing physical meet-ups. A good number of Kenyans have formed WhatsApp groups to raise funds for funeral expenses and raised hundreds of thousands using M-PESA in a matter of days to support their friends and loved ones in dire needs. M-PESA plays a very critical role in social circles and welfare. Thousands of chamas have their payments powered by M-PESA. Kenyans use chamas to pool resources and advance themselves economically and M-PESA has made it very easy for members to make contributions. The Chama officials are also able.
Tens of thousands of businesses in Kenya are now using M-PESA as their collection platforms. From Mitumba traders in Gikomba and Muthurwa to global clothing brands in Two Rivers mall to fishermen in Homabay, Lipa na Mpesa is powering hundreds of millions of transactions on a daily basis. These businesses are able to collect their money efficiently and also build good credit scoring datasets that help them get loans from the formal financial ecosystem. It is also very easy for them to do bookkeeping since their M-PESA statements are readily available from Safaricom self-service platforms.
M-PESA powered platforms such as Mshwari, KCB-MPESA and Fuliza have lent over Ksh 600bn to individuals and their businesses since 2012 with Mshwari alone lending up to KES 430 billion since its launch. Before M-PESA was launched, it was difficult for millions of individuals to access loans since their data was not part of the formal financial ecosystem.
Different value chains in Kenya use M-PESA to create value for their stakeholders. Households are able to power their electronic devices and light using M-KOPA Solar devices whose payments are made via M-PESA. Over 700,000 farmers have had their lives transformed through the Digifarm platform where they get quality information for sustainable farming. Farmers on the platform are able to purchase these inputs via M-PESA or credit payable between 30, 60 or 90 days depending on the credit package a farmer gets. City dwellers can hail rides while going to work and pay via M-PESA.
Safaricom has invested hundreds of billions of Kenya Shilling to build the distribution and operational scalability of the platform and ensure that over 20 million Kenyans are able to transact in the platform. Over 160,000 agents have created job opportunities for themselves and others from M-PESA business. The sun rises in the East and sets in the West and Safaricom’s M-PESA continues to provide convenience to millions of Kenyans and businesses while transacting. There is always an M-PESA agent in the neighbourhood.
